Ethereum (ETH) Faces Potential Price Dip Amid Foundation Selloff
By James Morales | May 6th, 2023, 14:15 GMT+0000 | Updated by Ryan James
The Ethereum Foundation has moved 15,000 ETH to a Kraken deposit address, sparking speculation about a potential price dip for the cryptocurrency. This recent selloff follows the foundation’s previous large-scale ETH selloffs that have preempted market downturns. In November 2021, the foundation sold a cache of 20,000 ETH worth around $9.5 billion, which coincided with the beginning of the 2021 ETH bear market. However, despite the selloff, Ethereum bulls are still trying to push the price up to surpass the critical $2,000 mark.
Although the foundation’s selloffs have triggered price drops in the past, the latest selloff is still relatively small compared to the one seen in 2021. The Ethereum Foundation has previously reported that they hold around 0.297% of the total ETH supply. Today, that value would put the foundation’s ETH holdings at nearly $700 million, which represents approximately 80.5% of their crypto and non-crypto holdings.
It’s important to note that the Ethereum Foundation has costs to cover. The organization has been busy lately and has developers to pay. For example, in the first quarter of 2023, it allocated $4,370,418 across its various research, development, and community programs. The foundation is also an active investor in the wider crypto ecosystem. In this role, it needs to be prepared to make high-value purchases. Last year, the foundation participated in a $10.5 million Series A funding round for workplace encryption startup Skiff, which enables secure account creation and document sharing using an Ethereum wallet.
Meanwhile, investors have been moving their ETH off exchanges since the beginning of May, and the total ETH supply on exchanges has reduced by 210,000 coins between May 1 and May 5. There has also been a notable surge in whale accumulation across the Ethereum network since the beginning of the month, justifying a more bullish ETH price prediction. Moreover, there has been an increase in ETH staked since the Shapella upgrade last month. This indicates that investors are happy to hold onto the asset for the long run, rather than seeing it as a short-term investment.
Although the Ethereum Foundation’s recent selloff has many concerned about a possible price dip in the near future, it’s important to note that such selloffs have also triggered positive results in the past. In 2019, Ethereum co-founder Vitalik Buterin convinced the foundation to sell 70,000 ETH “basically at the top” of its price range at the time. This decision allowed the foundation to double its funding runway. Therefore, it’s crucial that investors evaluate all factors before making any decisions based on this recent development.
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According to https://beincrypto.com/eth-foundation-selloff-fuels-price-correction/
The material in this article is written on the basis of another article.